that's it for me. i'm wolf blitzer in "the situation room." for our international viewers, world report is next. in north america, "john king usa" starts right now. thanks, wolf. good evening. tonight's britain's tabloid scandal escalates. two rupert murdoch-owned newspapers obtained and published information about prime minister gordon brown's family and finances. and tensions between the united states and syria, near a boiling point tonight. a government that beats its own people when they march peacefully slow to offer help when the united states embassy sund attack. tonight the united states being unable to pay its bills because it's maxed out its credit line. to get more spending power president obama is trying to broker a deal with congress that would slash $2 trillion in red ink over the next decade. republicans refuse to raise taxes. president obama is left to sound like a nagging parent.

no breakthrough at this afternoon's white house session. the president will reconvene the talks tomorrow. let's discuss the stakes and politics with jessica yellin and gloria borger. the sound we didn't quite have there was the time saying it's time to rip off the band-aid, eat our peas. he spent a half hour with the key negotiators in the room. what happened today? any progress? >> no breakthroughs, but the way it's been described to me is that they essentially turned the floor over to eric cantor, the leader in the house of representatives, who worked out so many of these details with vice president biden before speaker boehner and the president started negotiating. and they sort of let cantor spell out how he would get to a deal. cantor speaking largely for the conservative caucus in the house. and the bottom line is when cantor added up all his cuts, what i've been told is that it

only came to 1.7 to $1.8 trillion. well short of the 2.4 trillion needed, according to their own math, to raise the debt ceiling. so they sort of let him walk out there, show that it's just not enough on its own and let the whole group decide, how do we get to that 2.4 trillion, is it through raising revenue or do we go to the larger deal they've been talking about, sort of letting everybody see it just ain't enough on cuts alone. >> early in the negotiation, you lay out the parameters. gloria borger, listen to the president earlier today, to jess' point, you you reach a point, you have so much in cuts, you have to get to a certain number. the president and the democrats are saying the only way to get there is some revenue, some tax increases. the republicans control the house, the president is saying if they don't budge -- >> i do not see a path to a deal if they don't budge, period. i mean, if the basic proposition is it's my way or the highway,

then we're probably not going to get something done because we've got divided government. >> how much of this is, look, august 2nd is the deadline, the paper would like this on paper this week, but that's not going to happen. how much is the posturing, the positioning and how much is this a serious philosophical policy divide that they can't break. >> i think this is serious philosophical policy and i would add theological divide. you have house republicans who have taken a no new tax pledge and that's defining mr. politics. you have presidential candidates, republicans out on the trail saying don't vote to raise the debt ceiling. if this were just about politics for lots of republicans, they might have cut the john boehner deal because you would really help the deficit. but at this point, they believe they cannot vote for any kind of new taxes. and so compromise is going to be very, very difficult. >> listen to the president here

today because he knows that the republicans are saying he wants to raise taxes here in the middle of a recession. not exactly. it's not this year or next year. it's down the road. >> i want to be crystal clear. nobody has talked about increasing taxes now, nobody has talked about increasing taxes next year. what we have talked about is that, starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time when they're making billions of dollars of profits. >> what is the white house calculation as we get closer to the deadline, what can they get out of the republicans on revenue, what's their calculation? >> well, first of all, some of it's a little incoherent on both sides because there's so many potential deals in play.

if you go with the middle deal, one of the analyses is you can potentially get republicans to agree to some of these loopholes that we talk about closing the tax loophole for private jet owners, oil, gas companies, those sorts of things and maybe this payroll tax holiday, extending that and in exchange for some minor tweaking of medicare, but nothing that really gives the republicans too big a win on that issue. and they would also argue, to gloria's point earlier, that you actually need this. this is not just a win for democrats, you need it because you need democratic votes to get this through because you're going to lose so many republicans who simply won't vote to extend the debt ceiling under any circumstances. so that's the calculus if you went with the middle deal, there would be an entirely different math for a tax reform package if you went with that larger deal that's more in the $4 trillion range. >> the irony here to me is that a larger deal would in many ways

be easier to cut because it's so obvious what you would have to do. if you do a smaller deal, then you have to have eric cantor lay out by piece by piece by piece, cut by cut, by cut, what he would do if you don't have the revenue side of it. >> but to get the bigger deal, you need trust that they would actually then do comprehensive tax reform, rewrite the code so the republicans would make the case we didn't raise rates. trust is a word put to the test over the week plus of negotiations. jessica yellin, gloria borger, thanks. among those in the room richard durbin of illinois who is with us tonight from capitol hill. take us inside that room. these are a bunch of guys sitting around the table who, in the past anyway, don't have a great relationship of trust. what's it like in there? >> it's been a good meeting. we still have a long, long way to go. the president leads the meeting, as you might expect, with the vice president sitting across the table. he basically gives everyone a chance to speak their mind.

we've had a presentation of different points of view, different ideas. we haven't reached to a point that we need to be, but we're moving in that direction. the one thing for sure, the president said don't plan on doing anything else until this is done. we meet every single day until this is done. >> as you know and you catch some of these harpoons, if you call around among democrats, a lot will tell you, some in private, some publicly, we don't like the way this is going because the republicans have said we won't give you much if anything in the way of revenues, but the democratic president expects us to give him medicare, social security cuts. democracy for america put out this e-mail today. cutting social security, medicare or medicaid is insane. it will be a punch in the gut to middle class families and send the country deeper into recession. your base is not happy here. >> no, i understand that. they don't know the whole story and, frankly, we're not publishing a blow by blow of the conversation in the room, but this much i can tell you. we are not going to see any cuts in medicare, in medicaid,

certainly not social security. in the course of this conversation, this negotiation, we're certainly not going to see anything unless we're dealing with revenue that shows it can be sacrifice across the board and, if we go to those programs, it will be to strengthen those programs to make sure that they have a longer life that can continue to provide the basic benefits that we all want to see in those programs. >> let's be clear here. the republicans say they're open to closing some loopholes, getting rid of a few tax subsidies but rates won't raise. if all you get is loopholes, will this deal contain medicare and social security changes. >> i don't think so. >> then you won't get a deal, right? >> when you listen to cantor say his view of the world, we have to close some of the special interest loopholes. they are embarrassing, we can't justify them. but then we have to cut taxes with every dollar we save. that doesn't reduce the deficit. at the end of the day we're

still in this deep hole looking up. we have to put everything on the table in an honest fashion, that's revenue, entitlements and spending and come up with a package that's fair tulle americans that doesn't destroy medicare or social security. that makes them better. >> the speaker of the house doesn't agree with you. let's listen to john boehner, how he sees a deal. >> americans would say a balanced approach is a simple one. the administration gets its debt limit increase and the american people get their spending cuts and their reforms and adding tax increases to the equation doesn't balance anything. >> you're not getting taxes through the house, senator, so where does this go? >> well, john's my friend, but he's putting nothing on the table with that proposal. let's be honest about this, extending the debt ceiling is simply paying for things we've already spent. take the wars, for example, strongly supported by the republican party. now when we talk about borrowing the money to pay for them,

that's too big a sacrifice. let's cut spending. you know what their spending cuts consist of? asking for college students to pay more in interest, asking for senior citizens to pay more for medicare, asking hospitals to provide help for the poorest in america to receive less in reimbursement. no sacrifice for those doing well in america under the republican approach. >> what if the president very much wants this deal and he gets loopholes from the republicans and nothing more, but some new revenues but not by raising rates or cutting the bush tax cuts for the wealthy and he turns to you and said, i know this will be hard but i need you to go get me the votes and we need medicare and social security and savings, and i need you to sell this deal? >> it's not going to work. if we have to deal with the entitlement programs and look at them in an honest fashion, the republicans have to look at revenue in an honest fashion. to spare those wealthy people most comfortable in america

making over $250,000 a year from any additional sacrifice, but then to turn to working families putting kids through school or senior citizens and say you make the sacrifice, democrats won't support it. >> you're the number two democrat in the senate. you're pretty good at counts votes. based on where we are today and the republican adamancy of no tax increases, are we going to get a deal? >> it's going to be tough. today the president challenged their math. he added up all the things they want to cut and say, we don't get to the number you're talking about. you have to be more forthright in putting things on the table. and i might add, both sides should. but at this point we're not really making a lot of progress. we're really understanding our positions. there's more to be done. >> pretty clear when the speaker wanted to get the grand bargain and that would have had to include more dramatic tax revenues, pretty clear the message to the speaker from the tea party said no way, they wouldn't give him that long of a leash. what you are telling the

president -- you just talked here how you couldn't go to capitol hill and sell social security medicaid cuts. how blunt is your message to the president, sir, maybe in the past we could get you the votes, but maybe not this time? >> it's a little more dynamic. the president understands that. that's what he's told us. from his personal point of view. how can i ask the sacrifice from those struggling in america and not ask the most well off to at least put something in to make this work. he understands it. >> on a scale of one to ten, one wing probably not, ten being a deal, where are we? >> we're going to pass the debt ceiling. because in the privacy of that room everybody in the table knows that failing to extend the debt ceiling will be very damaging to this economy. at a time when we're struggling with unemployment, we don't need high sw rates or the full faith and credit of the united states, we need our credit report to be clean so we can move forward to build this economy. at the end of this day we'll have an understanding, we'll have the extension of the debt

ceiling. >> we'll see if that comes to pass. senator richard durbin of illinois. >> thank you. >> thank you. freshman congressman tim scott helps us understand the pressures on house speaker john boehner. then the u.s. embassy in syria is attacked and the syrian government is slow to respond. a network of possibilities. in here, the planned combination of at&t and t-mobile would deliver our next generation mobile broadband experience to 55 million more americans, many in small towns and rural communities, giving them a new choice. we'll deliver better service, with thousands of new cell sites... for greater access to all the things you want, whenever you want them. it's the at&t network... and what's possible in here is almost impossible to say. sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time.

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you're a doctor. you're a car doctor. maybe a car doctor. for weeks we've shown you syrian security forces attacking crowds of peaceful demonstrators. yes, attacking their own people. but in damascus today those same forces did nothing as 300 people attacked the u.s. embassy and the u.s. ambassador's residence. members of the mob broke windows and defaced buildings with spray paint, threw eggs and tomatoes. it appear to be retaliation for the u.s. ambassador's show of support for those syrians calling for peaceful change in their country. a few hours ago hillary clinton condemned the syrian government's inaction during today's violence. >> we demand that they meet their international responsibilities immediately to protect all diplomats and the property of all countries. the assad regime will not succeed in deflecting the world's attention from the real

story unfolding in syria. >> cnn's arwa damon is in damascus. i asked her how a security where the security apparatus is so tight that today's violence could have gone on and on and on. >> reporter: john, quite frankly, they haven't explained it just yet. we did reach out to them for official comment, but they said that they were fairly preoccupied with the national dialogue conference and did not have any comment as of yet. the u.s., for its part, has come out fairly hard slamming the syrian government for its inaction. and an official with the embassy here told us that this is an unfortunate distraction because the syrian government continues to beat, imprison, torture and kill people who want to peacefully protest. but this really is a sign of the deteriorating relationship between the syrian government and the west. >> the syrian government, to a degree, blames the u.s. ambassador, robert ford, because he has made now a couple of public demonstrations of

support. help us understand that better. >> yeah, and a lot of it really revolves around the trip that ambassador ford and the french ambassador took to the city of hamad. they went there on thursday, spent the night, then returned to damascus on friday. the syrian government enraged that such a trip had taken place. it's significant in that it has been the scene of some of the largest anti-government demonstrations, but last week the syrian military converged around it. the ministry of interior went so far as to post a statement saying that ambassador ford had met with saboteurs while in hama and that they were inciting the protests. >> would it be wrong to assume that any country where the security is so tight that this attack on the u.s. embassy could be payback? >> reporter: well, it is the natural assumption that one would draw, assuming that the syrian government did have a direct hand in it. it is true that the syrian security apparatus most certainly is incredibly capable of clamping down on

demonstrations as we have been seeing in the past when it chooses to do so. and that is something that u.s. embassy pointed out, too, questioning just how it is that this type of violent demonstration could take place. >> arwa damon, thank you. let's discuss this form wer the former state department official nicholas burns and security contributor fran townsend. nick burns, this relationship has been deteriorating for several weeks, a couple of months now. the syrian government gets mad at our ambassador, then our embassy there gets attacked. what now? >> john, syria's a police state. the group that attacked the american embassy, the ambassador's residence wouldn't have done that without the security of the government. so hillary clinton was within her right to insist that they adhere to the vienna convention of 1961, international law, that demands that all countries

protect diplomats within its boundaries. syria did not do that today. and they have a track record. about a decade ago they unleashed a crowd against another american ambassador's residence. this is part of their playbook, but it won't be acceptable to the united states. and we saw a firm response from the state department a firm response with words, but what next here in the sense that secretary clinton should complain about an attack on the u.s. embassy, but this government it includes attacking its own people as well. >> that's right. but let's be clear about what the motivation of the syrian government was in sort of condoning and allowing such an attack to take place. not only are they angry at ambassador ford who showed great courage in going to hamaa and with the french ambassador. they want want him out. as long as he bears witness to peaceful demonstrations, that's an impediment to their sort of using their forces against their own people. so this is, as nick suggests, this is part of their playbook.

they'd like to create a secure environment that is chaotic, which our people are at risk and we feel compelled to pull them back. so this is really -- it's like a brush pitch, john. they're looking to intimidate ambassador ford into leaving. >> we've talked about this in the past how the u.s. response to each one of these developments is not consistent in part because the circumstances is different. in syria, you have israeli complication, you have questions about iran and hezbollah. over the last couple of months the administration has ratcheted it up saying that assad has lost his legitimacy. secretary clinton seemed to take it a bit further. >> if anyone, including president assad, thinks that the united states is secretly hoping the se sheem will remerge from this turmoil to continue its brutality and repression, they are wrong. president assad is not indispensable. and we have absolutely nothing

invested in him remaining in power. >> is absolutely nothing invested in him, is that taking it to a new level? and if so, what next? >> i think it is, john. i think it's the strongest statement that i've heard from the obama administration. it's the correct path to take. i think we may be an important moment in this crisis. the syrian government has run that country with an iron fist, the assad family for 40 years. they're losing control. they don't control the major cities. they don't have enough military personnel to contain these peaceful demonstrations. and it may be at the momentum now is with the protesters. that's why it's so important for us, i think, to keep ambassador ford there. he's a very impressive diplomat. he's a fluent arabic speaker. as fran has suggested, he's someone who can bear witness, as she said, to these crimes that the syrian government is committing against its own people. >> if the u.s. government is putting increased pressure on assad, trying to empower the

ambassador, trying to support the demonstrators, in tehran, what are they thinking watching this? >> it becomes very difficult. you want to keep ambassador ford there. you got to keep him safe. i have no doubt they would have convened after this assault on our embassy and the ambassador's residence a security committee meeting and looked for ways to increase our own capability there. the syrians do have an obligation as nick mentioned under the geneva -- the vienna convention to make sure they protect diplomatic establishments. but we won't rely on them given what's happened today and we'll reinforce our own security and try to keep him there to increase pressure. i'm sure they're looking at additional sanctions. they may be trying to bolster support for a u.n. resolution. you may look at all the diplomat can tools they have available to them. >> nick, to the iranian part of this equation, what are they thinking? >> i think that there's a time, john, you remember early in the crisis, months ago, a big debate between the united states and israel, do we want to see assad

survive or leave? the fall of the assad regime would fundamentally weaken iran and hezbollah. that's good for the united states. the united states will keep the pressure on the assad government because we may be able to see the reduction of iran in the arab world. that's a great positive for us. >> nick burns, fran townsend, we'll keep on track of this story. fascinating developments in syria. sarah palin says she can win a national election, but will she run? great britain's hacking scandal spreads with allegations concerning a former prime minister. ok. [ cellphone rings ] hey. you haven't left yet. no. i'm boarding now... what's up? um...would you mind doing it again? last time. [ engine turns over ] oooohhhh...sweet. [ male announcer ] the chevy cruze with the my chevrolet app. the remote control car is finally here. well, now she's just playing with us. oh. [ horn honks ]

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great britain's hacking scandal grew even bigger today. a reporter in the guardian newspaper says two of murdoch's rival papers the sunday times and the sun obtained information about prime minister gordon brown's family and his finances. the british subsidiary of murdoch's news corp has already shut down "news of the world." on news they hacked into vice mail of dead soldiers and murder victims. one of his former aides has been arrested in connection with this scandal. >> these things we are hearing are absolutely appalling. and what people need to know is that i'm determined we will get to the bottom of this. >> cnn international's becky anderson is keeping track of murdoch's rapidly list of growing problems.

becky, let's just start with today. remarkable to hear from the former prime minister saying he was a target here. >> reporter: we're hearing talk that journalists and private investigators hacked into gordon brown's phone, as they had done with other people "the news of the world" but also tried to access by blagging, trying to be other people, access information on his accounts. perhaps the worst part of this story, john, is that they somehow gained gleaned information about the health of his kid. his son has cystic fibrosis. we believe that gordon brown only found out about this after a journalist rang him to talk to him about his son. >> blink and you might miss something in this scandal. thank you. today tony blair told our wolf blitzer he doesn't think he's been hacked and mr. blair says he's surprised people here in the united states are so scandalized by the story.

>> i'm quite surprised how shocked you guys are over here. >> we're pretty shocked. >> yeah. and maybe we just -- >> i'm shocked that you are not shocked. >> you know, i lived with it. for 50 years. >> should we be shocked? with us now the president and editor of "hhollywoodlife.com. and nile gardner. now that you're an expert, tep help us put that into context. it's pretty shocking when you find that bank accounts have been hacked, accounts of politicians, murder victims. >> we should be shocked and the british public clearly are deeply shocked by the whole affair. after all, we're talking here about highly illegal activity carried out by leading british journalists on a major newspaper "the news of the world." the scandal may be spreading to

some other newspapers. there is real public revulsion with regard to what is going on. the prime minister, of course, has ordered an independent inquiry into the whole affair, but i do think this has shocked the british people at this time, and we're just seeing even potentially the tip of the iceberg in terms of what is actually happening. so this is a deeply disturbing development i think for the british media. >> and one of the questions people ask -- i was asked in the supermarket the other day, don't you guys do the same thing? we have websites, celebrity gossip and do any of the publications based on your knowledge and experience do anything like close to what we're hearing across the pond, if you will? >> no. to the best of my knowledge, they do not. and yes, i've worked for a lot of organizations. and those news organizations and everywhere i've worked there's been a tremendous emphasis on

doing on the ground reporting, on having excellent sources backing up those sources, and being very clear that before you print or publish anything that is, you know, potentially scandalous or dangerous or, you know, could cross any line, that you really have to back your sources up. so i've never seen anything like this here. but let me also say that while we're a competitive media culture here, it is nothing like the kind of vicious newspaper wars that have been going on in great britain for many, many years. it's a very different popular culture and a very different media culture there than here. >> niles, one of the things that makes it fascinating is not just a media competition, a media story. it involves the highest levels of the uk government, former aide to prime minister cameron has now been arrested. there are allegations of cozy relationships going back and forth. listen to the prime minister

where he acknowledges that there's a problem and maybe sometimes we're too close to these people. >> for too long -- and i think all the politicians are to blame here -- for too long we had a cozy relationship with the media where we didn't ask tough enough questions, didn't actually get to grips with what was going on in terms of media abuse. that, i think, needs to be done, it needs to be done in a way where the media are clear that this is not some vindictive agenda to muzzle a free press. >> so where does this go? new laws or just a large both a political and cultural conversation about what's fair, what's not? >> i think certainly the political stakes are very high for the prime minister. after all, his former director of communications andy coulson has been arrested by the police, he's been interviewed. this is a serious matter at the very highest levels of government. however, i don't think we need to see a whole new wave of regulations sweeping into the british media. britain has a tremendous free

press, certainly we have a few rotten apples who have disgraced the british media. they should be dealt with. but i don't think you want a situation where you had the british press' hands tied and they're afraid to go after politicians. you don't want to see the kind of press you see in france, a very deferential press towards politicians. and i think the british people do take pride in a tremendously free media and it should remain so. >> i want to bring something up just to show the scope. so far these allegations have all been publication owned by rupert murdoch, his news corporation. if you look at the news corporation and its global reach, look at this list, newspapers, television stations in the united states and asia, europe, film companies, radio, part ownership in sports teams, publishing empire. is this a glancing blow to murdoch or is there a

fundamental question here that he'll have to answer? >> i don't think it's a glancing blow by any means. i think it's a very big blow. i'm sure he took great pride in his newspapers. he's a newspaperman at heart. he cannot be happy about this, but he's got a very large media empire, as you point out. and i think that at this point we have to believe that what has gone on is confined to the british newspapers that have been identified so far. i wouldn't jump to the conclusion that it's crossed any borders. >> even though you say none of these practices are employed here in the united states, do you see anything in your talking to celebrities, any hesitancy that there's more of a warineyw? >> i don't see -- there's no difference in how reporters are doing business today than they were a week before before the scandal broke. i think that while we have very

competitive journalists and reporters here, i think people are very wary here of not crossing lines. nobody wants to get sued. i think that we're very aware of that factor. and i don't think that we required more laws here. i mean, hacking phones is illegal. it's illegal here. i see no evidence that that's going on. >> as it should be. hacking phones. appreciate your insights. this dramatic story unfolding by the day. up next, the obama administration orders gun owners in four states to do extra work. with diabetes, it's tough to keep life balanced. i don't always have time to eat like i should. that's why i like glucerna shakes. they have slowly digestible carbs to help minimize blood sugar spikes, which can help lower a1c. [ male announcer ] glucerna. helping people with diabetes find balance. ♪ ♪ ♪

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welcome back. here's the latest news you need to know right now. the national rifle association says it will sue to stop new gun reporting requirements in california, arizona, new mexico and texas. the obama administration has ordered gun dealers to report the sales of high powered rifles under certain conditions in order to stem the flow of guns to drug cartels. tomorrow's memorial service for former first lady betty ford. mrs. ford died friday at age 93. still to come here, the tea party perspective on those high stakes negotiations between the president and the leadership about cutting america's red ink. [ barks ] ♪

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just a few days ago some believed house speaker john boehner might negotiate with the democratic president a sweeping deficit reduction deal in the ballpark of $4 trillion. now the target is about half that amount. why? because speaker boehner knows in the house of representatives with the new tea party members there's something that can't be in any deal, new taxes. >> i agree with the president, we cannot allow our nation to default on our debt. but to prevent a default, a bill must pass the congress. and a bill that doesn't meet these tests can't pass the house

of representatives. >> so just how much room does speaker boehner have to maneuver? let's check in with congressman tim scott. he's one of the freshmen of the republican caucus, also one of the tea party members who came to washington promising to do bold things when it comes to the debt and spending. speaker boehner was saying today, i want to negotiate with the president, i want to cut a deal, but i have to be able to pass in it the house of representatives. how short of a leash is the speaker on because of demands of freshmen like yourselves and other members of the tea party? >> i wouldn't say the speaker is on a leash at all. what i hear the speaker saying consistently and these are things we agree with. number one, the $2.4 trillion increase must have a $2.4 trillion offset in spending over the next ten years. and number two, we simply cannot increase taxes. >> now, when you say no higher taxes, is that higher rates or does that also mean closing loopholes, taking away tax

deductions for the big oil companies, is that okay with you? >> i think that we ought to look for parity in our corporate tax environment and one of the ways you do that is by lowering the top rate and eliminating some of the loopholes. without question we'd like to see all things on the table, so there's nothing na is a sacred cow that is a no. we do look for parity. in other words, if we are going to have a reduction of the rates and we'll close some loopholes, we do not want to increase additional revenues in that scenario. >> you heard from the president who essentially said i'm willing to give you cuts in spending, i'm willing to go to my party tore cuts in medicare and social security, the republicans have to give something. he didn't use your name but he said, i hear these guys saying send me to washington, i'm work on the deficit. here is your moment. are you willing to give him something? this has to be a compromise. >> our message to the president is very clear and very simple. there is not a revenue problem in washington, d.c., there is a spending problem, there is a

problem with priorities. we simply do not have those. if the president is looking for a place for us to compromise, here's our compromise, let's talk about spending cuts that saves america and our financial future. that's an area that we can compromise on. and i think that he ought to come to the table with a solution that also talks to the american people about how we are going to right the ship by spending less money in washington so there's more money to spend at home. >> some conservatives have said, you know, i hope we can work this out, but if we can't, no big deal. let's go past the august 2nd deadline and the treasury will have to deal with it. how much money we have and what bills to pay and what should be deferred. the president had tough words about that today. listen here. >> some of the professional politicians know better, and for them to say that we shouldn't be raising the debt ceiling is irresponsible. they know better.

and this is not something that, you know, i am making up, this is not something that tim geithner's making up. >> agree with the president on that point? >> there's no question that the necessity of a deal is very important. what it takes to get that deal is more important. so there's no question that we have to deal with what's in the interests of americans in the long term. having an increase in the debt ceiling has to be tied to absolute spending cuts, should include statutory limitations on what we can do from a discretionary budget and we agree this is not a game, that we are talking about the future of america, and to the extent that our president simply does not sit at the table and talk about the long-term viability of our economy and of our republic, i don't understand. >> now, the president hasn't said he would resort to this, but there are some who say if

there is no deal, that the president has constitutional powers and essentially he can just go and continue spending money without authority from the congress. i want you to listen to your own words here when this possibility came up back home. >> my position is that is an impeachable act. there's lots of things that people say, would you impeach the president for that? i say no. but this? this is catastrophic. this jeopardizes the credibility of our nation. if one man would usurp the entire system set up by our founding fathers -- >> it would be an impeachable offense in your view? >> i would say this, certainly we stirred up a hornet's nest, no question about that. when you listen to senator schumer and geithner talk about ways for the president to go around congress, we have to make sure that there's a line in the sand and the line is simply saying this, it's a warning. we want to make sure that the president stays at the table with congress and finds a way to

do what's in the best interests of the american people. all you have to do is with cong finds all you have to do is open the constitution, article one, section 8. it says very clearly, congress and only congress has the authority to borrow money. >> you believe that if he went otherwise, it would be an impeachable offense? >> i certainly think it would be the war of the ages. it would start the process we would not want to go down unnecessarily. it's very important for us to send a clear and concise message. let's stay at the table and get the deal done. >> do you believe there will be a deal by the end of the week? >> not by the end of this week, no. i think we have to go closer to august 2nd and even perhaps after august 2nd to make this happen. >> congressman tim scott, appreciate your time tonight. >> thank you, john. in a new interview, sarah palin says she is confident she will win a national election, but will she run? that's next. it makes its skylinr

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we don't know her next chapter, but we do know this. sarah palin doesn't lack confidence. the former alaska governor is on the cover of "news week" and says she believes she can win a national election. let's discuss her latest hints with peter bowyer. and shana walsh, peter, let's start with you. you have this extended conversation with governor

palin. you talk about going on into the night. what are her political ambitions. she says this to you. "i'm not so egoti. >> my gut sense was she was going to run. it's complicated. there is the sort of impenetrable palin sphere that she has erected around herself that, at the gates of which is her husband, todd palin and within that sphere, she operates with a complete freedom. it's a comfort zone for her, which would not be the case if she, of course, undertook to subject herself to that most intrusive process, running for

president. i personally sort of can't imagine her leaving the palin sphere to run for president, but she is very convincing in suggesting that she is in fact ready to run and she believes she can get the nomination and defeat president obama. >> the palin sphere. i like the way you put that. shana, you spent time with her in 2008. you written about her. to peter's point about the children, she says the family, "my kids know life isn't supposed to be easy and it's special not nfair. they know that. even on their end, they have to make sacrifices for the greater good." the governor herself had a child not that long before john mccain picked her. we went through tbristol ordeal. >> i think they've been through it. during the bus tour you mentioned, i was able to talk to

todd briefly and he said to me that the family has already been tested. i asked is this bus tour a test for the family. he said the family has been tested. we have already been out there and really indicated to me as governor palin indicated to peter that the family was all in. i think there are some family members like bristol that are more gung ho and would heal like her mom to run. others are more hesitant, but i think the family is on board. >> peter, what is it she doesn't like about the field? i want to read something she told you. "thank goodness the field has not been set. i think that there needs to be more vigorous debate and more folks need to jump in and articulate their position." eight or nine candidates out there now. what doesn't she like? >> i wouldn't wish to be unkind or to pretend to read governor palin's mind, but i guess my take from that was that the

thing that she most doesn't like about the field is that she's not in it. there are people, of course, michele bachmann, famously, and potentially governor perry of texas who represent that segment of the republican party that governor palin would also, i think, excite and energize, but, you know, she is ready and i think eager to get out there and articulate her opinion and her views on the subjects in a way that perhaps the others, to her ear anyway, are not yet doing. >> what's really interesting about the non-campaign already being waged on her behalf in iowa is that it's not traditional, there's no one hired, but there are people on the ground that are trying to

lay the groundwork without her even saying that she's there. you'll talk to some people in iowa who will say that she has more of a groundwork, more of a campaign there than people that are established candidates. i think that's fascinating. if she doesn't run, those people are going to be devastated. >> eight months. peter, who pays for this? he said, well, you burn through your savings account. that's the kind of passion that i think that, one thing we know about a palin campaign, should it materialize, is that it would be starkly unconventional. this in fact might be precisely what it looks like. >> peter, shana, we will await the